Trade News

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Indonesia make case for more trade with Canada

One Thursday, about 150 people packed a conference room in Vancouver to hear about investing opportunities in the fourth-most-populated and ninth-largest economy in the world, a market whose total GDP was $2.4 trillion last year.

Few Canadians will be able to say what country that is, a challenge the event’s organizer admits.

But that may be about to change. That’s because Indonesia — the answer to the Trivial Pursuit question above — may be looking at increasing its profile in Canada.

The annual promotional event, “Remarkable Indonesia,” is in its fourth year. But this is the first since president Joko Widodo (locally known by his nickname Jokowi) took office in October.

Widodo’s victory in July over rival Prabowo Subianto is widely seen as a watershed in Indonesia politics — a public referendum against business-as-usual in Jakarta’s political scene. The fact that Widodo, a former governor of Jakarta who came from a poor background and lacked connections to the military, was able to win over someone with close ties to former military ruler Suharto (who ruled for 30 years) signalled the nation’s desire for change to international observers.

For a country that (like most southeast Asian counterparts) comes with significant historical baggage on human rights issues, the word “democracy” now freely emerges from discussions of Indonesia’s attractiveness to foreign investors.

For Ian Lifshitz, director of the Canadian branch of Indonesia-based Asia Pulp and Paper, the conversation can now be focus on Indonesia’s realities on the ground — the people’s improving living standards, and what it means for business opportunities.

“People should see what Indonesia really is: A potentially strong trading partner for Canadian businesses and a country with rich economic and cultural resources,” Lifshitz said Thursday. “If you walk down the street in Jakarta today, you can’t help but notice all the major brands on the storefronts — and the increasing purchase power the growing middle class now possesses. But if you ask 10 Canadians about Indonesia, a good number probably can’t point Indonesia out on a map. That needs to be changed.”

According to statistics, Indonesia’s trade with Canada reached $3 billion last year. While that seems like a large figure, the potential — given Indonesia’s population of 252 million — could be much higher. And give Ottawa’s recent attention towards Southeast Asia, the new realities in Jakarta may present as an opportunity.

Challenges remain. Political corruption is common and will take more than one election to fix. The role of the military in Indonesian politics continues. And the topic of how the government addresses the social upheaval in the 1960s (stemming from the military’s rooting-out of Communist elements) will also remain highly sensitive.

But Widodo has already begun the change in political attitudes and practices. A populist, he has cut domestic fuel subsidies to increase spending on education and infrastructure, while limiting excessive spending on official functions and slashing bureaucrats’ budgets. He was even seen flying to Singapore to attend his son’s graduation on an economy-class ticket (although some criticized this as a publicity stunt).

Logistically, Canadians looking to reach — much less to invest in — Indonesia face another challenge. There are currently no direct flights to Jakarta or Bali from Vancouver, although major Asia hubs like Tokyo, Seoul, Beijing, Shanghai, Taipei and Hong Kong are all good connection points.

At this point, Indonesia’s profile in Vancouver’s Asia-Pacific consciousness remains in the shadows of players like China, Japan and South Korea.